Storm clouds gather over British Economy.

9th July 2019.

The business news has made grim reading in the last 24 hours, as the storm clouds gather over the British Economy

Employment outlook dips

BDO analysis shows Britain’s employment outlook fell again in June, continuing a dip that comes after six years of sustained growth.

BDO’s Employment Index, which analyses forward-looking employment intentions, declined by 2.29 points from January to 112.82 points for June. The firm found that the outlook for the labour market at its lowest in more than a year after falling for the second consecutive month.

Peter Hemington, a partner at BDO, said: “The glory years of rising UK employment figures could be coming to an end. While the numbers remain in positive territory, growth is slowing.” He added: “There’s no sugar-coating the fear that job prospects will take a hit.”

CBI: No-deal threat sees investment dip

The Confederation of British Industry (CBI) has warned that Brexit uncertainty is dragging on investment, estimating that business spending is set to decline by about 1.3% in 2019, marking the steepest drop since 2009.

With the economy growing by 1.5% in 2018, the business lobby group expects GDP growth will ease slightly to 1.4% in 2019, before a slight acceleration to 1.5% in 2020.

The CBI’s chief economist, Rain Newton-Smith, said: “For any business it’s hard to take spending decisions now. When the risk of a no-deal Brexit feels very real at the moment, why would you take a big decision now? You would wait and see until the end of October. The main risk, though, is we fall off a cliff of no-deal Brexit.”

Business investment set to dip

Analysis from the EY Item Club is set to forecast business investment will fall by 1.6% in 2019, with this coming on the back of a 0.4% decline in 2018.

The overall growth forecast points to a 1.3% rise in GDP this year, dragged down by a 0.2% fall in the second quarter, followed by 1.5% growth in 2020. The report is expected to attribute the slowdown in investment to political uncertainty, the potential for a disorderly Brexit and the lack of clarity around the nation’s future trading relationship with Europe.

Mark Gregory, EY’s chief economist, said: “Three years after the Brexit vote, the UK economy is arguably more uncertain and unpredictable than it was in 2016.”

KPMG lowers growth expectation

KPMG ‘s Economic Outlook report predicts GDP growth will reach 1.4% in 2019, falling to 1.3% in 2020.

This is a 0.2% decline since the firm’s previous report, which was published in March.

KPMG chief economist Yael Selfin said: “Recent weeks saw the gathering of clouds over the global horizon, with growing talk of a possible recession and a change in tune by major central banks as they gather their depleted arsenal to the rescue. The UK now has to consider the global backdrop a headwind.”

Meanwhile, separate KPMG research shows that total funds raised in the UK in the first half of 2019 reached £19.2bn, up 22% on H2 2018. While the number of IPOs dipped compared to H1 2018, funds raised through them rose 4%.

Surveys raise Q2 concerns

City AM ’s Julian Harris says that the Office for National Statistics’ (ONS) GDP estimate for May, due this week, will offer a clue to whether the economy shrank in the second quarter, saying “so far, the signs are not good.”

He notes that the ONS estimated a 0.4% contraction in April and points to private sector business surveys which suggests Q2 will deliver a decline.

Mr Harris highlights new EY analysis which predicts a 1.6% drop in business investment in 2019, with growth set to be lower if the Brexit deadline is extended beyond October, as well as a CFO survey from Deloitte which shows finance chiefs are at their most risk-averse since the financial crisis.

CFOs expect Brexit to hit business

Deloitte ’s latest CFO survey shows that more than eight in ten (83%) chief finance officers expect Brexit to harm the business environment.

The Q2 survey of 79 CFOs at large UK businesses saw just 4% say that now is a good time to take a greater risk on to their balance sheet. This marks the highest level of caution since the financial crisis.

Some 47% of respondents expect to reduce capital spending in the near future, while the survey also suggests hiring is likely to dip, with 62% saying they expect to reduce staff intake over the next three years due to Brexit.

Deloitte’s chief economist , Ian Stewart , said: “Events in the last three years, and recent news suggesting the economy shrank in the second quarter, have added to worries about the impact of Brexit.” He added that Britain’s exit from the EU “is acting as a drag on corporate sentiment and spending.”

Sole traders struggle

Institute for Fiscal Studies (IFS) research, which analysed tax records from HMRC, shows that one in five businesses set up by sole traders closes within a year and six in ten fail by their fifth year.

It was also found that median sole trader profits are 7% below pre-recession levels and despite there being 25% more sole traders since 2007, their combined turnover is lower than before the recession.

Helen Miller, deputy director of the IFS, said the Government may need to reconsider its policy of encouraging start-ups, saying: “Low and falling incomes among the self-employed and low levels of investment among small business more broadly should lead us to question why we are incentivising people to quit employment and start their own business.”

Sales fall prompts Brexit clarity call

The British Retail Consortium (BRC) has called for urgent clarity over Brexit, saying that uncertainty has contributed to a fall in sales.

The BRC’s monthly health check of the sector, conducted with KPMG, shows that total sales fell by 1.3% in June, while the annual rate of growth slowed to 0.6%. These figures are the weakest since the survey was launched in 1996.

Helen Dickinson, the BRC’s chief executive, said: “June sales could not compete with last year’s scorching weather and World Cup, leading to the worst June on record.”

KPMG’s head of retail Paul Martin said: “Pressure on retailers continues to mount and is seemingly coming from all angles: economic, geopolitical, environmental and behavioural.”

Global economic slowdown stabilising

The global economic slowdown could end without a recession, according to a new report by the Organisation for Economic Cooperation and Development (OECD), which suggests that growth is heading for a more stable footing as countries including the UK show signs of stabilising.

OECD chief economist Holger Schmieding said: “We do not find serious excesses that would require a cleansing recession in the next two or three years.”

Productivity dips for third consecutive quarter

The Office for National Statistics has released data that shows that productivity fell in Q1, marking the third consecutive quarter of decline and the joint sharpest fall since the end of 2015.

Output per hour worked fell 0.2% compared to Q1 2018 and follows a 0.1% slide seen in Q4 2018.

The manufacturing sector saw productivity decline by 0.9%, while in the services sector a 0.2% increase was recorded.

According to the Resolution Foundation productivity is now 28% below averages seen before the financial crisis a decade ago. Howard Archer, chief economic adviser to the EY Item Club , commented: “Part of the UK’s recent poor labour productivity performance has undoubtedly been that low wage growth has increased the attractiveness of employment for companies.”

What does this all mean for CPA members?

Now is the time to check that your staff are being strict on the credit limits you have set for credit customers and you are not being over-extended.

All sorts of excuses will come up as people try to get increased credit before paying for previous orders.

Use such times as a reason to ask them to bring forward a payment, not to extend their limit and watch out for any change in the payment practices by credit customers.

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cash-flow.

Don’t let your bankers control you, contact CPA today.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

New warning over catastrophic effects of late payments

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you realise you could be sitting on a fortune?

Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.

If you sold B2B on credit then there may be a hidden source of capital you can call on.

If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.

Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.

We can help you uncover the pile of gold, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.

Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.

You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.

That compensation could provide the cash boost your business needed.

But don’t delay, that compensation evaporates if not claimed within six years of the late payment.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit.  You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping business owners  who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

Those former clients who regularly paid you late can finally be made to pay.

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

Do you sell on credit?

With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.

Those customers will look for the easiest option  to boost their cash-flow. Don’t let it be you.

You can’t just assume your customers can and will pay you eventually, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

See the section below – About CPA.

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply on credit, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

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See all our latest news here!

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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections